International Business: Why is the use of self-reference criterion probably the biggest cause of international blunders pdf

INTERNATIONAL BUSINESS

1.              Why is the use of self-reference criterion probably the biggest cause of international blunders/ errors with examples?

The SRC (Self Reference Criterion) is an unconscious reference to one's own cultural values, experiences, and knowledge as a basis for decisions. Closely connected is ethnocentrism, that is, the notion that people in one's own company, culture, or country knowing best how to do things.

In basic terms SRC means to forget about self, like if a company is going to some another country then the going company will have to take care about the culture etc. of the host country and will have to forget about our culture.

Expanding into a new market is no small feat. Regardless of your industry, you’ll be faced with the challenge of perfectly synchronizing tons of moving parts in order to truly make an impact. The last thing you’ll want to do is to ruin your grand entrance with an embarrassing faux-pas. Unfortunately for many brands, they wind up doing just this.

Examples of such international blunders in real life business scenarios are:  

Being Lost in Translation:

Translating complex terms and phrases from one language to another is never easy. Get it right, and you’ll fit right into your new market. Otherwise, you’re leaving yourself wide open to a whole mess of troublesome possibilities.

Case Study: Mercedes-Benz, KFC and Pepsi Rush to Die in China

For one reason or another, even world-famous brands seem to have an extra rough time when it comes to China. Mandarin is a richly detailed language with layer upon layer of subtlety; in short, there are many ways to screw everything up.

When Mercedes-Benz first tried entering the Chinese market, they did so under the name “Bensi”. It sounds close enough to “Benz”, but sadly, it also means “rush to die.” Not the best image for a car company looking to make a strong first impression.

Mercedes-Benz isn’t alone. KFC’s tagline “finger-lickin’ good” was rendered as an invitation for Chinese customers to “eat their fingers off,” while “Pepsi brings you back to life” was given the far more unsettling translation of “Pepsi brings your ancestors back from the grave.”

Key Takeaway: Hire a Native Speaker

The best way to make the right kind of splash with your brand is to work with a native speaker of your target language. Even better, partner up with a professional translation agency who deals with your target market. They’ll have the experiences and resources to ensure you nail it the first time.

What’s in a Name?

A brand or product name that delivers in one language might perform equally well in another. Or, it could fail miserably. The auto industry has a rich history of cross-language mix-ups that result from the colorful names given to various car models. Let’s dive in.

Case Study: Mitsubishi Pajeros, Ford Pintos and AM Matadors

Back in the 1970s, American Motors decided to bring their Matador to Puerto Rico. While the name conjures up inspirational feelings of courage back on the mainland, in Spanish, “matador” simply means “killer”. As expected, Puerto Ricans weren’t exactly lining up at the dealerships.

Ford’s Pinto fared similarly in Brazil. In Portuguese, “pinto” is slang for male genitalia which are considerably less than impressive in size. Ford quickly adjusted the car’s name to Corcel, meaning “horse”.

The most famous example of this trope is arguably the Mitsubishi Pajero, originally an SUV with a name inspired by a Patagonian wild cat. Unfortunately, “pajero” is far less cool in Spanish, where it is instead an insult similar to “wanker” or “jerk”. Subsequently, the Pajero was renamed as the Montero in many markets with significant Spanish-speaking populations.

Key Takeaway: Do Your Research

Sure, the cool-sounding name you’ve picked might test amazingly in your home market. But especially if it’s a borrowed word, make sure its meanings are equally kosher across all your target audiences. Slang terms are especially prone to this type of error, so tread with caution.

A Rose Is Not Always a Rose

Even if you’ve taken our previous point to heart, you’re not out of the water quite yet. There’s still the chance that your name might sound similar to another word in your target language, and you’ll need to proof yourself against this type of mix-up as well.

Case Study: Vicks VapoRub, or Ficks FapoRub?

Vicks, originally named after Dr. Joshua Vick, assumed their storied brand name would hold up as well in their new German market as it does back home. They failed to realize, however, that Germans pronounce “v” as “f,” and that in German, “ficks” refers to a certain intimate act performed behind closed doors.

Vicks has since rebranded itself in Germany to the much more family-friendly Wick.

Key Takeaway: Sound Is as Important as Spelling

This is another reason why it’s so crucial to consult with a native speaker in each of your target markets before debuting your brand. The most extensive dictionary of colloquialisms in the world wouldn’t have warned Vicks about this German-specific hiccup.

Race: It’s Not a Toy

You’d think that common sense would dictate that race, along with other sensitive topics such as gender or sexual orientation, should never be used as an advertising gimmick. Yet time and time again, brands continue to put their worst foot forward with one oblivious campaign after another.

Case Study: Dove and Nivea, Repeat Offenders

Dove and Nivea, two of the world’s most well-known makers of grooming and beauty products, have both revealed a particular lack of foresight when it comes to race in advertising.

Dove recently made headlines with an ad for its body wash which, to many viewers, suggested that a black woman was being “cleaned up” into a white one. Dove was quick to apologize, but the damage to their reputation had already been done.

Nivea’s ad, intended for Middle Eastern markets, featured the slogan “White is purity” printed over a white-clad woman. Viewers were quick to point out the ad’s racial undertones, and the campaign was immediately appropriated by white supremacist groups across the internet. The ad was soon pulled, but again, the cat was already out of the bag.

2.                  Although forces in the foreign environment are the same as those in the domestic environment, they operate differently, why is it so?

I believe communication is the major reason why they operate differently because domestic business environment communication is typically easier than in international environments. Employees in the domestic environment are typically from the same culture and speak the same language fluently, although exceptions do of course exist.

The basic difference in domestic and international business arrives from the differences in environment of their operations. International managers have to deal with environmental challenges, which are beyond the firm’s control and do vary significantly among countries.

There are lots of differences in managing international business as compared to domestic business. Carrying out business internationally rather than just locally is preferred for many reasons; the business could be expanding to new markets, finding new suppliers or a new production capacity. However, International business is more complex due to the many factors that affect the undertakings of the business.

3.                  Why do you think foreign activities are more complex than purely domestic ones?

International business is the exchange of goods and services among individuals and businesses in multiple countries. Scope of international business is quite wide. It includes not only merchandise exports, but also trade in services, licensing and franchising as well as foreign investments.

While Domestic Business on the other hand refers to trade transactions within a nation's border. This means that the trader deals only with local currency, customs, and regulation. Different from International Business, Domestic business pertains to a limited territory. Though the firm has many business establishments in different locations, all the trading activities are inside a single boundary.

Activities that make International Business more complex than Domestic Business are: Culture, Market Intelligence, Level of Competition, Politics/Government, Legal Systems, International Law, Technology, Logistics and the Media.

CULTURE: Culture defines everything a society does, from its business practices, to its response to advertising and marketing, to negotiating sales. No two cultures are the same.

MARKET INTELLIGENCE: To enter international market one has to

v    Understand how the market works.

v    Who your direct competition is, and

v    The best market entry strategy.

It is important to get as much information as you can to successfully enter the international market.

LEVEL OF COMPETITION: The level of competition you will experience in foreign markets is likely to be more dynamic and complex than you experience in domestic markets.

POLITICS/GOVERNMENT/LEGAL SYSTEMS: No two countries have the same political and legal systems. Each government has its own policies relating to foreign firms and products.

The key is to understand that once you are in a foreign market you must abide by the rules and laws of that country, not the ones in your own country market.

INTERNATIONAL LAWS: There are numerous laws that affect international business. Countries determine their laws based on the needs of their citizens not the concerns of foreign companies. When a company is engaged in international business, what company representatives can legally do is controlled by both their nation and the foreign nation with which they are doing business.

TECHNOLOGY: The degree of technology can vary substantially in foreign markets. If your product or service requires a high degree of technology sophistication to use or implement, then markets with low levels of technology will not be suitable for your business.

LOGISTICS: Like technology, business infrastructure in foreign markets will be at different levels of development. This may well have an impact on your ability to get your products to that market.